Michael Eisner's Walt Disney Company - Essay Example

Michael Eisner’s Walt Disney Company Michael Eisner’s Walt Disney Company Question Walt Disney is one of the popular individuals in the media industry who rose from the ground to building one of the most reputable brands in the world today. He laid notable emphasis on differentiation and business level strategy to grow his business. Historically, Walt Disney started out as a cartoonist meant for the newspaper of his school. At the age of 16, Disney dropped from school to serve in the army although his young age led to his rejection. He decided to join the Red Cross in France where he drove an ambulance for one year. He also made comics for a local newspaper in the political segment. Based on his interest in cartoons, Walt entered into a partnership to form “Iwerks-Disney Commercial Artists,” an initiative that made Disney develop an interest in the work of animation. To advance in his new career, Walt decided to borrow a camera from an advertising company, which encouraged him do develop further interest in Animation. Based on this drive, he managed to create the “Laugh-O-Gram Studios.” As his interest advanced in the field of animation, he opted to establish his firm after forming an agreement with Frank Newman to play the cartoons that Disney made in his theatre (Wasko, 2013). Initially, “Laugh-O-Gram Studios” became relatively big before going bankrupt in Kansas City. A mouse, Mickey, inspired “Oswald” creation later on. This resulted in the phrase “It All Started with a Mouse.” However, after Disney lost the rights he had in “Oswald,” he embarked on the road to creating his unique character, the “Mickey Mouse.” During this time, Technicolor was taking shape in the industry, making it possible for Walt to introduce additional characters in his work. He won an award in 1932 after Mickey emerged as the most common cartoon in the animation history (Wasko, 2013). Driven by the urge to create a full film, Disney initiated working on “Snow White” in 1934. He accomplished this initiative in 1937. This emerged as one of the highly successful film for 1938, which fetched more than $8 million for the company. Presently, this figure is equivalent to $132,671,390. After the success of “Snow White,” Disney embarked on a path to create Fantasia and Pinocchio. With the growth of Disney, Walt went to Hollywood and established the Walt Disney Studio before it went into debt. Here, although movies would not be considered as financially successful in the case of Disney, they had some degree of popularity (Wasko, 2013). Furthermore, during the World War II era, Disney was committed to the growth of his business. “Cinderella” was introduced, which realized undisputed success after “Snow White.” After witnessing that animation did not serve as the only way that could attract the attention of the public, Walt embarked on a path to create fictional characters and make a movie out of them, such as “Mary Poppins.” He later advanced to television before his death. When Roy O. Disney took control of the company, it witnessed flat years between 1966 and 1984. To advertise the company, the name of Walt Disney featured in various products being offered. Presently, Disney serves as a part of the popular culture in America. This means that the strategies that Disney adopted played a key role in boosting the growth of the company (Wasko, 2013). Question 2 (SWOT Analysis) Strengths High demand for home videos and motion pictures to drive growth of the company Growth in terms form recreation and entertainment services due to huge investment on land Variety of products, including Disney world and movie making Establishment of additional divisions for movie making Home video brought undisputed revenue Creation and promotion of Disneyland and Disney channel Weaknesses Lack of a powerful leader did not create a new strategy for Disney Failure to take advantage of the prevailing opportunities Disappointing profits during initial years of growth Failure to gather appealing scripts reliance on rerun classics and past glory Overreliance on past glory Management worried concerning company spirit Opportunities Advancements in technology offered further avenues for growth in terms of products and services provided Popularity of travel allowed theme parks to offer additional business opportunities Establishment of Pixar leading to major areas for growth Threats Disney got stuck with Walt’s death New competition was forming posing threats to the company’s market share and earnings Infighting between stockholders and company managers Management problems in movie division Question 3 Michael Eisner introduced certain strategies that facilitated in further growth of the company. He added recreation and entertainment centers, identified diverse customer segments, and increased entry price to the film industry dramatically. He also announced additional attractions constantly, such as addition of gates, Imagineering segment, development of hotels, adding television and motion pictures, raise money for additional projects, as well as sold limited partnerships for films. To keep the company growing in a dynamic manner Eisner also embarked on hiring creative and talented individuals as well as hired inexpensive stars (Wasko, 2013). The formation of agreements with Viacom drove Disney’s growth potential further with the launch of VCR for Disney classics and an addition of animation series on Sundays. Furthermore, with the acquisition of KHU TV in 1989, the company managed to turn a loss of $10 million to a profit of $588 million. The firm also introduced consumer products as well as licensed the firm’s brand name, particularly when a mouse or a duck became a dominant figure in toys for almost all homes. By the end of 1988, the company had managed to negotiate approximately 3000 agreements with different manufacturers. In addition, a different strategy introduced to Disney was the one that emphasized on adding more stores for the company’s products and charging premium prices. After purchasing Childcraft Corp in 1988, Disney later embarked on publishing books and sell expertise to dominant firms. It also embarked on marketing vehicles as well as boost global sales. These initiatives played a key role in terms of boosting the overall growth and increased competitiveness of the company (Wasko, 2013). A corporate strategy has also provided the company with an opportunity to diversify. The success and stability of Disney has been fostered by the diversification strategy it has implemented. With continued diversification in terms of product offering, it should also concentrate on acquisition processes to expand in the current as well as new markets. The corporate level strategy for Disney is driven by the introduction of animation studios, television (Disney Channel), vertical integration, consumer products, Paxar, and social gaming. The company has also expanded into films, theme parks, television, among other products and services. To facilitate in this initiative, the company abandoned the loyalty model and shifted towards the outsourcing restaurant, hotels, as well as in regulation of the whole value chain. Furthermore, Disney is also adopting its core competence to boost the level of creativity, which will facilitate in expanding hotels and theme parks (Wasko, 2013). Eisner has played a crucial role with regard to diversifying the animation introduced by Walt Disney. From the main animation industry, he has ventured into leisure and entertainment, which are not related entirely. Nevertheless, by focusing on leisure and recreation in the perspective of a theme park, this may be considered relevant, hence an ideal form of diversification. Additionally, in relation to the direct operating system of the company, it has been possible to foster close cooperation in various divisions. The use of direct Disney content has made the serves offered by different business units to improve on duality and increase the variety. For instance, for those individuals who used to use Disney products early, they would only access animation products. Nevertheless, with the expansion in the range of choice, it is now possible for users today to consume diverse products from Disney. The increased level of consumers has led to an increase in client base, leading to significant rise in consumption levels. These have resulted in a notable rise of the company’s earnings, boosting its competitiveness in the marketplace (Wasko, 2013). Reference Wasko, J. (2013). Understanding Disney: The Manufacture of Fantasy. New York: John Wiley & Sons. Read More